Renewable energy construction has been booming for the last two decades. After years of decline in new natural gas projects, however, the industry experienced a small uptick this year. And with the impending change of administration, that trend is likely to continue through the end of the decade.
New natural gas projects experienced an upsurge between 2013 and 2019 peaking at 41% of all announced new projects. Since then, it has been in sharp decline. Gas projects plummeted to only 5% in 2023 and 2024 with renewables rising to 94%. To some, it looked like the end was in sight for new natural gas plants. But the 2025 prediction is up to 7% and probably continue to rise for several more years to come.
Too Much of a Good Thing
Most people have a favorite desert. But, during the holiday season, overindulgence makes it clear you can have too much of a good thing. It is the same with renewables.
Ideally, renewables should be on the grid in volume, but there comes a point where the system can’t take anymore and retain stability.
Rolling blackouts in California are a testament to the need for diversity of power sources to ensure grid reliability. Wind and solar can be piled on to where the grid cannot absorb all the wind and solar at certain points of the day.
At other times, there is so little wind and solar that traditional generation needs to support almost the entire system. That happened late in 2024 in a dunkelflaute (a German term) which means ‘dark doldrums’ or ‘dark wind lull’. It indicates a period when little or no energy can be generated with wind and solar power, due to lack of wind or sunlight.
In Germany and the UK, both of which have an abundance of renewable energy, wind and solar generation recently fell to 3% on some days. Natural gas production in the UK had to be ramped up from a standby mode to providing 60% of UK power.
Situations like this call into question the wisdom of using legislation to outlaw coal and natural gas generation for wind and solar. The IIR graph of new builds may indicate an incipient backlash against the “only renewables” movement.
Among regions leading the way are Southeast USA where 21% of all new-build generation over the next five years is projected to come from natural gas; the Mid-Atlantic region at 14%, the Southwest region at 12% (Texas, Oklahoma, Arkansas, and Louisiana), and the Great Lakes region at 11%.
Southwest developers showed the biggest leap, from 3.8% new built natural gas in 2024 to 12% in 2025. Texas, though, is in the vanguard. It plans to build over 30 GW of gas-fired generation during 2025 – 2029. The Lone Star State instituted a fund of $10 billion to support the construction of new natural gas plants and the refurbishment of aging facilities.
As well as grid stability, this makes sense from an economic standpoint. The U.S., with its largest reserves of natural gas in a decade, has low natural gas prices, and at least 100 years of gas reserves to hand. The next few years will show whether the rest of the country has the sense to allow a small slice of the energy pie to natural gas generation as a guarantee of grid reliability.
“Any move to boost the construction of new-build gas-fired generation in the United States will be helped by fuel’s low cost, widespread abundance, and relative price stability,” said Britt Burt, an analyst at IIR.
